Slow Beer

Saturday, March 31, 2007

Beer News - Micro Brewing Pre-Budget Submission

Many thanks to Anton for giving me the heads on the linked pre-budget submission paper that is advocating the introduction of a 'WET' style rebate for small brewers.

The WET tax (Wine Equalisation Tax) was introduced at the same time the GST was inplemented to ensure taxes on wine, under the new system, would equate with the old 41.9% sales tax. That is, multipling the GST of 10% by the WET tax of 29% gives the same tax payable outcome.

The micro winery scene was given a most welcome tax break last budget with a full WET rebate on the first $500,000 of tax payable. It is only fair that our craft brewers receive a similar hand-up (not 'out'!) and in essence they are seeking excise refund of 60% of duty paid in a financial year up to a maximum of $500,000.

Cam from Mountain Goat is doing a good job of driving this change campaign and you may see him pop up in the press from time to time promoting the change. Let's hope the amendments get up as the changes will only enhance consumer choice for well crafted micro beers.

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5 Comments:

  • Here's a recent SMH article on the subject.

    By Anonymous Anonymous, at 11:55 am  

  • Cheers Geoff.

    I note with interest that Lion Nathan a%#%hole's remark on focusing on mid and low strength beers. Clearly talking his own book there as that piece of s%$# brewer has a decent slab of low ABV products. What about looking after quality players? He also probably thinks LN make good beer!!

    Sorry - rant over

    By Blogger Stewart Went, at 12:55 pm  

  • Yeah, that made me cringe. Lion Nathan (50% owned by Kirin) and Fosters obviously put dollars before quality. What pisses me off more than their bland beers are acquisitions. Coopers almost got done by LN a few years ago and I'm deadly sure that popular Matilda Bay (Fosters) beers have been tweaked to cut costs, uh no, "increase the gross profit margin".

    I really hope, if this change is pushed through, that further "boom" would substantiate real numbers i.e. from 1% to 5-10% of the market. This would be a huge gain, probably wishful thinking. I dream of the day where every local pub would have at least two local micros on tap!

    By Anonymous Anonymous, at 1:38 pm  

  • Hi Geoff,

    A couple of thoughts:

    1) At the end of the day FBG and LN have an ultimate responsibility to their owners (ie the shareholders) so I won't fault them of being profit motivated but I am seriously pissed off by their inability to embrace and support the whole market. Craft brewing in the hands of a major is / should be attractive as it takes the focus away from the need for huge volumes to make $$ (ie smaller brands generally hold higher margins).

    2) As I may have noted elsewhere Matilda Bay beers, in the main, are shit and not worth the $18 a 6-pack asked. I'll concede that the odd supermarket deal of a mixed case for ~$50 is good value, and I'm of the view that the Alpha and the Dog Bolter are genuinely good beers.

    3) The micro 'explosion' is gonna happen. Well, it might not explode but it will show growth, at least at retail, that will excede wine. 12 months ago beer was 5% of our business, its now 10% and I reckon I can get it to 20% over time. We now have access to nearly 500 beers and I get emails every day from people all over the country in search of decent beer. This just didn't happen in 2005.

    Unfortunately Australia still possesses a strong bogan (or conservative?) element that actively refuses to take a 'risk' to try and eat / drink better. That's why 2 supermarkets have an 80% market share and the landscape is blighted with fastfood establishments. I think we've become more 'American' than American's themselves.

    So....I reckon the scene will get better but it will take time. I should noted the heart was gladened by the sight of some many young folk at the recent Fed Square tasting, all keen to try something different.

    cheers

    By Blogger Stewart Went, at 4:04 pm  

  • "Craft brewing in the hands of a major is / should be attractive as it takes the focus away from the need for huge volumes to make $$ (ie smaller brands generally hold higher margins)."

    This is partially happening with Matilda Bay. I think the "Brewer's range" (Alpha Pale, Barking Duck and co.) are brewed at the old Stockade brewery up near Dandenong, where the main beers are brewed in WA at larger scale. Fosters is giving Matilda Bay the freedom to experiment and create craft beer. This is definitely good for us but I have a soft spot for "independents" as they're often doing it out of their love for their craft, so hopefully the tax relief occurs as to ensure they stay afloat, make profit and spur new micros.

    I guess, to most of people, beer is still considered a bogan drink. So indeed you make a good point there; we are still bogans but the signs are good.

    Cheers

    By Anonymous Anonymous, at 4:57 pm  

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